JBL Financial Services, Inc. Jeff & Erin Lapidus President 7710 Carondelet Ave Suite 333 Clayton, MO 63105 MO: 314-863-0008 FAX: 314-863-0009 [email protected]http://www.jblfinancial.com March 2017 Why Diversification Matters Why a Life Insurance Claim May Be Denied What happens to my property if I die without a will? What are some tips for creating a home inventory? The Coach's Corner From your Retirement Coaches and Advisors Due Date Approaches for 2016 Federal Income Tax Returns See disclaimer on final page Hello All, As temperatures begin to rise as we enter into March, we tend to feel more of the urge to get outside and enjoy the warmth this season brings. Whether it is enjoying dinner and drinks on the patio, or perhaps deciding it’s time to refresh your spring wardrobe, both of these scenarios tend to involve spending your hard earned money. With that being said, are you being fiscally responsible? Are you where you want to be financially with your long term goals? Check in with us and make sure you’re still on track to a happy and prosperous retirement – one you can enjoy! We are continuing to accept new clients, so feel free to give us a call today to set up a complimentary coaching session at 314-863-0008. Warm wishes, Jeff and Erin Lapidus Tax filing season is here again. If you haven't done so already, you'll want to start pulling things together — that includes getting your hands on a copy of last year's tax return and gathering W-2s, 1099s, and deduction records. You'll need these records whether you're preparing your own return or paying someone else to do your taxes for you. Don't procrastinate The filing deadline for most individuals is Tuesday, April 18, 2017. That's because April 15 falls on a Saturday, and Emancipation Day, a legal holiday in Washington, D.C., is celebrated on Monday, April 17. Unlike last year, there's no extra time for residents of Massachusetts or Maine to file because Patriots' Day (a holiday in those two states) falls on April 17 — the same day that Emancipation Day is being celebrated. Filing for an extension If you don't think you're going to be able to file your federal income tax return by the due date, you can file for and obtain an extension using IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Filing this extension gives you an additional six months (to October 16, 2017) to file your federal income tax return. You can also file for an extension electronically — instructions on how to do so can be found in the Form 4868 instructions. Filing for an automatic extension does not provide any additional time to pay your tax! When you file for an extension, you have to estimate the amount of tax you will owe and pay this amount by the April filing due date. If you don't pay the amount you've estimated, you may owe interest and penalties. In fact, if the IRS believes that your estimate was not reasonable, it may void your extension. Note: Special rules apply if you're living outside the country or serving in the military and on duty outside the United States. In these circumstances you are generally allowed an automatic two-month extension without filing Form 4868, though interest will be owed on any taxes due that are paid after April 18. If you served in a combat zone or qualified hazardous duty area, you may be eligible for a longer extension of time to file. What if you owe? One of the biggest mistakes you can make is not filing your return because you owe money. If your return shows a balance due, file and pay the amount due in full by the due date if possible. If there's no way that you can pay what you owe, file the return and pay as much as you can afford. You'll owe interest and possibly penalties on the unpaid tax, but you'll limit the penalties assessed by filing your return on time, and you may be able to work with the IRS to pay the remaining balance (options can include paying the unpaid balance in installments). Expecting a refund? The IRS is stepping up efforts to combat identity theft and tax refund fraud. New, more aggressive filters that are intended to curtail fraudulent refunds may inadvertently delay some legitimate refund requests. In fact, beginning this year, a new law requires the IRS to hold refunds on all tax returns claiming the earned income tax credit or the refundable portion of the Child Tax Credit until at least February 15. 1 Most filers, though, can expect a refund check to be issued within 21 days of the IRS receiving a return. 1 IRS.gov (IR-2016-117, IRS Urges Taxpayers to Check Their Withholding; New Factors Increase Importance of Mid-Year Check Up, August 31, 2016) Page 1 of 4
What happens to my property if I die without awill?
What are some tips for creating a homeinventory?
The Coach's CornerFrom your Retirement Coaches and Advisors
Due Date Approaches for 2016 Federal Income Tax Returns
See disclaimer on final page
Hello All,
As temperatures begin to rise as weenter into March, we tend to feel more ofthe urge to get outside and enjoy thewarmth this season brings. Whether it isenjoying dinner and drinks on the patio,or perhaps deciding it’s time to refreshyour spring wardrobe, both of thesescenarios tend to involve spending yourhard earned money.
With that being said, are you beingfiscally responsible? Are you where youwant to be financially with your long termgoals? Check in with us and make sureyou’re still on track to a happy andprosperous retirement – one you canenjoy! We are continuing to accept newclients, so feel free to give us a calltoday to set up a complimentarycoaching session at 314-863-0008.
Warm wishes,
Jeff and Erin Lapidus
Tax filing season is here again. If you haven'tdone so already, you'll want to start pullingthings together — that includes getting yourhands on a copy of last year's tax return andgathering W-2s, 1099s, and deduction records.You'll need these records whether you'repreparing your own return or paying someoneelse to do your taxes for you.
Don't procrastinateThe filing deadline for most individuals isTuesday, April 18, 2017. That's because April15 falls on a Saturday, and Emancipation Day,a legal holiday in Washington, D.C., iscelebrated on Monday, April 17. Unlike lastyear, there's no extra time for residents ofMassachusetts or Maine to file becausePatriots' Day (a holiday in those two states) fallson April 17 — the same day that EmancipationDay is being celebrated.
Filing for an extensionIf you don't think you're going to be able to fileyour federal income tax return by the due date,you can file for and obtain an extension usingIRS Form 4868, Application for AutomaticExtension of Time to File U.S. IndividualIncome Tax Return. Filing this extension givesyou an additional six months (to October 16,2017) to file your federal income tax return. Youcan also file for an extension electronically —instructions on how to do so can be found in theForm 4868 instructions.
Filing for an automatic extension does notprovide any additional time to pay your tax!When you file for an extension, you have to
estimate the amount of tax you will owe andpay this amount by the April filing due date. Ifyou don't pay the amount you've estimated, youmay owe interest and penalties. In fact, if theIRS believes that your estimate was notreasonable, it may void your extension.
Note: Special rules apply if you're living outsidethe country or serving in the military and onduty outside the United States. In thesecircumstances you are generally allowed anautomatic two-month extension without filingForm 4868, though interest will be owed on anytaxes due that are paid after April 18. If youserved in a combat zone or qualified hazardousduty area, you may be eligible for a longerextension of time to file.
What if you owe?One of the biggest mistakes you can make isnot filing your return because you owe money.If your return shows a balance due, file and paythe amount due in full by the due date ifpossible. If there's no way that you can paywhat you owe, file the return and pay as muchas you can afford. You'll owe interest andpossibly penalties on the unpaid tax, but you'lllimit the penalties assessed by filing your returnon time, and you may be able to work with theIRS to pay the remaining balance (options caninclude paying the unpaid balance ininstallments).
Expecting a refund?The IRS is stepping up efforts to combatidentity theft and tax refund fraud. New, moreaggressive filters that are intended to curtailfraudulent refunds may inadvertently delaysome legitimate refund requests. In fact,beginning this year, a new law requires the IRSto hold refunds on all tax returns claiming theearned income tax credit or the refundableportion of the Child Tax Credit until at leastFebruary 15.1
Most filers, though, can expect a refund checkto be issued within 21 days of the IRS receivinga return.1 IRS.gov (IR-2016-117, IRS Urges Taxpayers toCheck Their Withholding; New Factors IncreaseImportance of Mid-Year Check Up, August 31, 2016)
Page 1 of 4
Why Diversification MattersWhen investing, particularly for long-term goals,there is one concept you will likely hear aboutover and over again — diversification. Why isdiversification so important? The simple reasonis that it helps ensure that your risk of loss isspread among a number of differentinvestments. The theory is that if some of theinvestments in your portfolio decline in value,others may rise or hold steady, helping to offsetthe losses.
Diversifying within asset classesFor example, say you wanted to invest instocks. Rather than investing in just domesticstocks, you could diversify your portfolio byinvesting in foreign stocks as well. Or you couldchoose to include the stocks of different sizecompanies (small-cap, mid-cap, and/orlarge-cap stocks).
If your primary objective is to invest in bonds forincome, you could choose both governmentand corporate bonds to potentially takeadvantage of their different risk/return profiles.You might also choose bonds of differentmaturities, because long-term bonds tend toreact more dramatically to changes in interestrates than short-term bonds. As interest ratesrise, bond prices typically fall.
Investing in mutual fundsBecause mutual funds invest in a mix ofsecurities chosen by a fund manager to pursuethe fund's stated objective, they can offer acertain level of "built-in" diversification. For thisreason, mutual funds may be an appropriatechoice for novice investors or those wishing totake more of a hands-off approach to theirportfolios. Including a variety of mutual fundswith different objectives and securities in yourportfolio will help diversify your holdings thatmuch more.
Mutual funds are sold by prospectus. Pleaseconsider the investment objectives, risks,charges, and expenses carefully beforeinvesting. The prospectus, which contains thisand other information about the investmentcompany, can be obtained from your financialprofessional. Be sure to read the prospectuscarefully before deciding whether to invest.
Diversifying among asset classesYou might also consider including a mix ofdifferent types of asset classes — stocks, bonds,and cash — in your portfolio. Asset allocation is astrategic approach to diversifying your portfolio.After carefully considering your investmentgoals, time horizon, and risk tolerance, youwould then invest different percentages of yourportfolio in targeted asset classes to pursueyour goal.
Winning asset classes over timeThe following table, which shows how manytimes during the past 30 years each asset classhas come out on top in terms of performance,helps illustrate why diversifying among assetclasses can be important.
Number of winning years,1987-2016
Cash 3
Bonds 5
Stocks 10
Foreignstocks
12
Performance is from December 31, 1986, toDecember 31, 2016. Cash is represented byCitigroup 3-month Treasury Bill Index. Bonds arerepresented by the Citigroup Corporate Bond Index,an unmanaged index. Stocks are represented by theS&P 500 Composite Price Index, an unmanagedindex. Foreign stocks are represented by the MSCIEAFE Price Index, an unmanaged index. Investorscannot invest directly in any index. However, theseindexes are accurate reflections of the performanceof the individual asset classes shown. Returns reflectpast performance and should not be consideredindicative of future results. The returns do not reflecttaxes, fees, brokerage commissions, or otherexpenses typically associated with investing.
The principal value of cash alternatives may fluctuatewith market conditions. Cash alternatives are subjectto liquidity and credit risks. It is possible to losemoney with this type of investment.
The return and principal value of stocks may fluctuatewith market conditions. Shares, when sold, may beworth more or less than their original cost.
U.S. Treasury securities are guaranteed by thefederal government as to the timely payment ofprincipal and interest, whereas corporate bonds arenot. The principal value of bonds may fluctuate withmarket conditions. Bonds are subject to inflation,interest rate, and credit risks. Bonds redeemed priorto maturity may be worth more or less than theiroriginal cost.
The risks associated with investing on a worldwidebasis include differences in financial reporting,currency exchange risk, as well as economic andpolitical risk unique to the specific country.
Investments offering the potential for higher rates ofreturn also involve higher risk.
Diversification and assetallocation are methods usedto help manage investmentrisk; they do not guaranteea profit or protect againstinvestment loss.
Page 2 of 4, see disclaimer on final page
Why a Life Insurance Claim May Be DeniedLife insurance can be an important financial toolfor you and your family. For example, lifeinsurance can help replace earnings that wouldcease upon your death. It can provide a legacyfor your children or grandchildren, and caneven be used to make a charitable gift afteryour death.
However, the fact that you've purchased lifeinsurance doesn't guarantee that the deathbenefit will be paid when it's needed most —after you've died. There are several reasonsinsurance companies may attempt to deny, orat least delay, paying a claim for the deathbenefit. Here are some possible circumstanceswhen a death-benefit claim may be contestedby the insurer.
Misstatements on the applicationA clause that's commonly found in lifeinsurance contracts is the incontestabilityclause. A life insurance claim may be denied ifthe insurer finds that the applicant mademisstatements on the policy application anddeath occurs within two years of the policy'sstart date. If the applicant makes statementsintended to defraud the insurer, there isessentially no time limit, and the claim can bedenied no matter how long the policy has beenin force. That's why it is very important toprovide accurate information on the policyapplication and not withhold information or factsthat are requested by the insurer.
A good example of a policy being contestedinvolved actor Heath Ledger, who died withinseven months of purchasing a $10 million lifeinsurance policy for the benefit of his daughter.The medical examiner ruled that the cause ofdeath was due to an accidental drug overdose.Subsequently, the insurer denied the claim ontwo grounds: The death was the result of anintentional drug overdose and amounted tosuicide, and the insured did not disclose on theinsurance application (as requested) that hewas a user of illegal drugs, which is a materialmisrepresentation. The policy beneficiary suedthe insurer, and the case was eventually settledfor an undisclosed amount believed to be muchless than the policy death benefit.
Suicide clauseMost life insurance policies contain a suicideclause, which generally states that no deathbenefit will be paid if the insured's death resultsfrom suicide within two years from the inceptionof the policy. Often, policy owners inadvertentlyrestart the two-year suicide clause when theyreplace existing life insurance with a newpolicy.
Even in the unfortunate circumstance that
death by suicide occurs within two years fromthe policy's inception, the beneficiaries may stillbe able to receive at least a portion of the deathbenefit, depending on the circumstances. Forexample, whether death is intentional (suicide)or by accident is not always easily determined.
Policy lapseA life insurance policy may not be in forcebecause the coverage has lapsed. Policies maylapse for several reasons, includingnonpayment of the premium and expiration of astated term. Insurers generally send writtennotifications when a premium payment is pastdue, when the policy is about to lapse, andwhen a policy has actually expired. Sometimesthe policy owner may inadvertently orintentionally neglect to make premiumpayments. In any case, the insurancebeneficiary may not realize that the policy haslapsed until after the death of the insured.
An insurer may deny payment of the deathbenefit when death occurs outside the policycoverage term. Term life insurance providesdeath benefit coverage for a stated number ofyears, usually from one to 25 years, dependingon the policy purchased. This type of insuranceis also common through employer-providedplans. In any case, if the insured's death occursafter the policy term has expired, the claim forinsurance proceeds will be denied.
What can you do?Nothing can be more emotionally trying thanhaving a life insurance claim denied whiledealing with the loss of a loved one. Here aresome tips that may help get the death benefitpaid.
Whether you fill out the life insuranceapplication or it is completed by a life insuranceagent, be sure you review each section of theapplication and answer each question honestly.Do not withhold or falsify information.
Pay the premiums on time. Indicate analternative address for mailing the premiumnotices and also name another individual toreceive notices of premium lapses. If you moveor change financial institutions and don't notifythe insurer, you may forget about the premiumpayments and the policy could lapse withoutyour knowledge.
If you have group life insurance, verify that it isstill in force at least once each year. Also,review your policy with an insuranceprofessional. You may not realize that your lifeinsurance will end on a certain date.
As with most financialdecisions, there areexpenses associated withthe purchase of lifeinsurance. Policiescommonly have mortalityand expense charges. Inaddition, if a policy issurrendered prematurely,there may be surrendercharges and income taximplications.
Any guarantees associatedwith payment of deathbenefits are based on theclaims-paying ability andfinancial strength of theinsurer.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017
There are many ways to receive morestraight talk and input from your favoriteAdviser and Retirement Coach:
Listen to my show "Straight Talk onRetirement" every Saturday from10-11am on KTRS 550-AM.
I am accepting new clients so please donot hesitate to offer your friends and familymembers the chance to visit me for a freecoaching session- let's help them get theirfinancial life on track!
Securities offered through LPL Financial,member FINRA/SPIC. Investment adviceoffered through Private Advisor Group, aRegistered Investment Advisor. PrivateAdvisor Group and JBL Financial ServicesInc., are separate entities from LPLFinancial. The information in this article isnot intended to be tax or legal advice, andmay not be relied on for the purpose ofavoiding any federal tax penalties. You areencouraged to seek tax or legal advicefrom an independent professional adviser.The content is derived from sourcesbelieved to be accurate. Neither theinformation presented nor any opinionexpressed constitutes a solicitation for thepurchase or sale of any security. Thismaterial was written and prepared byBroadridge.
What are some tips for creating a home inventory?Imagine having to rememberand describe every item inyour home, especially afteryou've been the victim of afire, theft, or natural disaster.
Rather than relying on your memory, you maywant to prepare a home inventory — a detailedrecord of all your personal property. This recordcan help substantiate an insurance claim,support a police report when items are stolen,or prove a loss to the IRS. Here are some tipsto get started.
Tour your property. A simple way to completeyour inventory is to make a visual record ofyour belongings. Take a video of the contentsof each room in your home and spaces whereyou have items stored, such as a basement,cellar, garage, or shed. Be sure to opencabinets, closets, and drawers, and pay specialattention to valuable and hard-to-replace items.You can also use the tried-and-true low-techmethod of writing everything down in anotebook, or use a combination approach.Mobile inventory apps and software programsare available to guide you through the process.
Be thorough. Your home inventory shouldprovide as many details as possible. For
example, include purchase dates, estimatedvalues, and serial and model numbers. Ifpossible, locate receipts to support the cost ofbig-ticket items and attach copies of appraisalsfor valuables such as antiques, collectibles, andjewelry.
Keep it safe. In addition to keeping a copy ofyour inventory in your home where you caneasily access it, store a copy elsewhere toprotect it in the event that your home isdamaged by a flood, fire, or other disaster. Thismight mean putting it in a safe deposit box,giving it to a trusted friend or family member forsafekeeping, or storing it on an external storagedevice that you can take with you or on acloud-based service that provides easy andsecure access.
Update it periodically. When you obtain avaluable or important item, add it to yourinventory as soon as possible. Review yourhome inventory at least once a year foraccuracy. You can also share it annually withyour insurance agent or representative to helpdetermine whether your policy coverages andlimits are still adequate.
What happens to my property if I die without a will?If you die without a will, yourproperty will generally passaccording to state law (underthe rules for intestatesuccession). When this
happens, the state essentially makes a will foryou. State laws specify how your property willpass, typically in certain proportions to variouspersons related to you. The specifics, however,vary from state to state.
Most state laws favor spouses and childrenfirst. For example, a typical state law mightspecify that your property pass one-half orone-third to your surviving spouse, with theremainder passing equally to all your children. Ifyou don't have children, in many states yourspouse might inherit all of your property; inother states, your spouse might have to sharethe property with your brothers and sisters orparents.
But not all property is transferred by will orintestate succession. Regardless of whetheryou have a will, some property passesautomatically to a joint owner or to a designatedbeneficiary. For example, you can transferproperty such as IRAs, retirement plan benefits,
and life insurance by naming a beneficiary.Property that you own jointly with right ofsurvivorship will pass automatically to thesurviving owners at your death. Property held intrust will pass to your beneficiaries according tothe terms you set out in the trust.
Only property that is not transferred bybeneficiary designation, joint ownership, will, ortrust passes according to intestate succession.You should generally use beneficiarydesignations, joint ownership, wills, and truststo control the disposition of your property sothat you, rather than the state, determine whoreceives the benefit of your property.
Even if it seems that all your property will betransferred by beneficiary designation, jointownership, or trust, you should still generallyhave a will. You can designate in the will whowill receive any property that slips through thecracks.
And, of course, you can do other things in a willas well, such as name the executor of yourestate to carry out your wishes as specified inthe will, or name a guardian for your minorchildren.
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January 25, 2017
Kyle Smith Broadridge Business Process Outsourcing, LLC2 Journal SquareJersey City NJ 07036
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